• We believe the misinformation that has been published about retained asset accounts will ultimately hurt beneficiaries, who are almost always better off using a retained asset account rather than receiving a “check” in the mail.

• When someone with a life insurance policy dies, the money from the policy may be paid to their beneficiaries through the delivery of a “checkbook” with immediately available funds. Prudential’s retained asset accounts have always paid more interest than conventional bank checking accounts.

• The accounts have effectively protected families and other beneficiaries during the most vulnerable of times—when their world has been turned upside down as they deal with the sudden loss of a loved one. The funds are available to beneficiaries right away, most importantly while they deal with their loss. They do not have to worry about going to the bank to deposit a check into their account or establishing a new account if they don’t have one.

• Retained asset accounts provide a place for beneficiaries to safely keep their money while they decide what to do with it. Drafts can be used to withdraw the full account balance the moment a checkbook is received if the beneficiary feels confident about making decisions right away.

• A concern that has been raised is that retained asset accounts are not FDIC insured and that this is not adequately disclosed. We disclose this and that these accounts are backed by the financial strength of Prudential. In addition, retained asset accounts are protected by State Guaranty Funds that provide protection of at least $250,000 and up to $500,000.

• These guarantees are at least the same as—and in most cases exceed—FDIC guarantees. Retained asset accounts have, on balance, greater protection than FDIC insured accounts because FDIC guarantees are limited to $250,000, while the current death benefit for servicemembers is $400,000.

• The interest rates paid on retained asset accounts are competitive with similar options, such as checking and many money market accounts, which involve funds that are readily available and do not put principal at risk. In fact, over the last five years the interest rate Prudential has paid on retained asset accounts has been higher than the prevailing rates for checking and many money market accounts.

• Retained asset accounts were created at the request of consumers to provide options for receiving benefits from a life insurance policy, and with proper disclosure, consumers have generally been happy with this flexibility.

• If beneficiaries don’t want their money to remain in a retained asset account, they may deposit the funds—at any time—in the financial institution of their choice. Beneficiaries who find a better interest rate can move the money by simply writing a draft. Account holders can also designate a beneficiary for the account so their funds can pass tax free to heirs like life insurance proceeds.

• These drafts look and function like checks. They can be used to withdraw funds or make purchases. Prudential processed 84,000 drafts for servicemembers’ beneficiaries and more than half a million drafts overall in 2009.

• Additional data on the use of Alliance Accounts provide encouraging insight into how well they work. There is robust movement of money through Alliance Accounts and frequent use of drafts. About 40 percent of the money initially held in Alliance Accounts is withdrawn within the first two months, and our typical experience shows that more than 70 percent of Alliance Account holders write at least one check in the first three months that they have the account. This activity confirms that, in general, beneficiaries know what they have when they have an Alliance Account, and they use it.

• The vast majority of beneficiaries benefit from payments through retained asset accounts. For both regulators and companies, consumer complaints are few and far between. The system ensures that beneficiaries get every cent of what they were promised, plus interest for the entire time their money is held in retained asset accounts. It is wrong to suggest that anything is taken away from beneficiaries.

• Unlike a check for the full amount written to the beneficiary, which takes time to clear, there is no time when the funds are not earning interest for the owner.

• For the past 20 years, retained asset accounts have served families well—protecting their financial interests, while providing ease of use in times of enormous emotional distress.